3 Stocks Reiterated As A Hold: SLB, PANW, PM
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
NEW YORK (TheStreet) -- TheStreet Ratings team reiterated 3 stocks with a hold rating on Tuesday based on 32 different data factors including general market action, fundamental analysis and technical indicators. The in-depth analysis of these ratings decisions goes as follows:
Schlumberger NV:
(NYSE:
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.4%. Since the same quarter one year prior, revenues slightly increased by 6.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has slightly increased to $3,913.00 million or 1.63% when compared to the same quarter last year. Despite an increase in cash flow, SCHLUMBERGER LTD's average is still marginally south of the industry average growth rate of 3.92%.
- Despite currently having a low debt-to-equity ratio of 0.35, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.32 is sturdy.
- SCHLUMBERGER LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, SCHLUMBERGER LTD reported lower earnings of $4.30 versus $5.11 in the prior year. For the next year, the market is expecting a contraction of 10.5% in earnings ($3.85 versus $4.30).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Energy Equipment & Services industry. The net income has significantly decreased by 81.8% when compared to the same quarter one year ago, falling from $1,664.00 million to $302.00 million.
- You can view the full analysis from the report here: Schlumberger Ratings Report
Schlumberger Limited supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company operates through Reservoir Characterization Group, Drilling Group, and Production Group segments. Schlumberger has a market cap of $107.5 billion and is part of the basic materials sector and energy industry. Shares are down 0.9% year-to-date as of the close of trading on Monday.
Palo Alto Networks Inc:
(NYSE:
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C-. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- PANW's very impressive revenue growth greatly exceeded the industry average of 0.5%. Since the same quarter one year prior, revenues leaped by 50.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, PANW's share price has jumped by 88.07%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- PANW's debt-to-equity ratio of 0.96 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that PANW's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.46 is high and demonstrates strong liquidity.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 282.5% when compared to the same quarter one year ago, falling from -$7.86 million to -$30.07 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, PALO ALTO NETWORKS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: Palo Alto Ratings Report
Palo Alto Networks, Inc. provides enterprise security platform to enterprises, service providers, and government entities worldwide. Palo Alto has a market cap of $11.5 billion and is part of the technology sector and computer hardware industry. Shares are up 19.1% year-to-date as of the close of trading on Monday.
Philip Morris International Inc:
(NYSE:
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, weak operating cash flow and deteriorating net income.
Highlights from the ratings report include:
- Despite the weak revenue results, PM has outperformed against the industry average of 23.1%. Since the same quarter one year prior, revenues slightly dropped by 7.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for PHILIP MORRIS INTERNATIONAL is rather high; currently it is at 66.25%. Regardless of PM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PM's net profit margin of 22.39% compares favorably to the industry average.
- In its most recent trading session, PM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- PHILIP MORRIS INTERNATIONAL's earnings per share declined by 16.9% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, PHILIP MORRIS INTERNATIONAL reported lower earnings of $4.76 versus $5.26 in the prior year. For the next year, the market is expecting a contraction of 9.4% in earnings ($4.31 versus $4.76).
- Net operating cash flow has decreased to $1,354.00 million or 41.63% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: Philip Morris International Ratings Report
Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes, other tobacco products, and other nicotine-containing products. Philip Morris International has a market cap of $128.3 billion and is part of the consumer goods sector and tobacco industry. Shares are up 1.8% year-to-date as of the close of trading on Monday.
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